Please answer the requested question

Remaining Time: 22 minutes. 46 seconds. Question Completion Status: Question Three (6 Marks) Selected data for two divisions of the Bahrain Company are given below: Manama Division Amwaj Division Net sales $4,000,000 $7,000,000 Average total assets $2,000,000 $2,000,000 Net operating income after taxes $360,000 $420,000 Average plant assets $950,000 $800,000 Average cost of capital 10% 12% Each division is considering a capital investment of $1,000,000. The annual return on the capital investment is 11%. Invested capital is defined as total assets. Required: A) The Manama Division's manager is evaluated using residual income. Should Manama Division accept the capital investment? Why or why not? Explain. B) The Amwaj Division's manager is evaluated using residual income. Should Amwaj Division accept the capital investment? Why or why not? Explain. C) The Manama Division's manager is evaluated using return on investment. Should Manama Division accept the capital investment? Why or why not? Explain. Activet Question 13 of 20 A Moving to another question will save this response Close Window TOSHIBA